Cape Town - Motorists should brace themselves for yet another price increase shock when the cost of petrol is hiked on Wednesday.
According to the Automobile Association (AA), fuel prices are set for a sharp jump at the beginning of next month, with the potential of further rises in the medium term.
The AA was commenting on unaudited month end data supplied by the Central Energy Fund.
“International petroleum prices continued their upward march during May and the weakening rand/US dollar exchange rate has exposed the consumer to the full force of oil’s strength,” said the AA.
“Petrol is set for a rise of 52 cents a litre in June, illuminating paraffin will be up 61 cents, and diesel a full 78 cents.”
The association said it was worried by the steady rise in oil prices in the current weak rand environment, in spite of international opinion that global over-supply could see prices pull back.
According to the Department of Energy, crude oil benchmarks have rallied since late April because of issues regarding geopolitical concerns affecting the market.
The drop in output in Nigeria, Colombia and the US contributed to the surge in prices during the past month.
“An energy crisis in Venezuela, where power outages due to a drought and subsequent reduction in power generation at the country’s main hydropower facility, was beginning to affect the wider economy including operations in the oil and gas sector,” said the department.
The department said the recent wildfires in Canada reduced crude oil exports to the US.
“With South Africa’s weak economy, our concern is that even if oil prices moderate, further declines in the rand will mask the benefit."